Graff v. United Collection Bureau, Inc., 132 F. Supp. 3d 470

Plaintiff Thomas Graff sued United Collection Bureau (UCB) under the FDCPA, alleging voicemail/answering‑machine messages that failed to identify UCB or state the calls were for debt collection.
The original complaint sought a New York class; an amended complaint (filed by consent during settlement talks) added a Nationwide class.
Parties negotiated a settlement providing roughly $39,819.43 in cy pres to the National Consumer Law Center (≈1% of UCB’s net worth), $2,500 to the named plaintiff, up to $250,000 for administration, and up to $175,000 in attorneys’ fees; no direct payments to absent class members.
Notice was sent to ~568,000 potential class members; 523,300 received actual notice; 66 opted out and one objected (Good/Bradley‑Good).
Objector challenged (a) the magistrate judge’s authority to enter final judgment by consent, (b) the breadth of the release (sweeping beyond FDCPA claims), (c) the expansion to a Nationwide class diluting per‑member value, and (d) the propriety of an exclusive cy pres settlement that yields no direct relief to class members.
The magistrate judge found consent jurisdiction proper, but rejected final approval of the settlement as unfair and modified the class to the original New York class.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Magistrate judge jurisdiction under 28 U.S.C. §636(c)	Consent (by parties/notice) and implied consent from class notice; magistrate may preside	Same (parties consented)	Magistrate jurisdiction upheld; precedent (Roell, Williams, Dewey, Day) supports that absent class members’ consent is not required
Scope of release (release allegedly covers non‑FDCPA claims, e.g., TCPA)	Broad releases are routine; release limited to claims arising from same facts; settlement value is small so broad release is acceptable	Defendant seeks comprehensive peace from all claims arising from same facts	Release overly broad here; when settlement relies on FDCPA liability cap, release must be limited to FDCPA claims sharing the same factual predicate
Class definition / Nationwide expansion	Amended complaint added Nationwide class during settlement negotiations	Defendant benefits from nationwide release and limited total liability under FDCPA cap	Nationwide class is overbroad and dilutes relief; court narrows class to the original New York class
Exclusive cy pres remedy (no direct payments to class)	Cy pres appropriate where direct distribution is infeasible; parties obtained statutory maximum aggregated recovery under FDCPA cap	Settlement’s exclusive cy pres is efficient and places funds with a consumer‑oriented organization	Exclusive cy pres that gives class members no measurable direct relief is unfair and inadequate; settlement denied without prejudice

Roell v. Withrow, 538 U.S. 580 (2003) (implied consent to magistrate judge jurisdiction is acceptable where parties were informed and voluntarily proceeded)
Williams v. Gen. Elec. Capital Auto Lease, Inc., 159 F.3d 266 (7th Cir. 1998) (absent class members are not parties for §636(c) consent requirement)
Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170 (3d Cir. 2012) (aligning with Williams on magistrate consent and class members)
Day v. Persels & Associates, LLC, 729 F.3d 1309 (11th Cir. 2013) (magistrate §636(c) jurisdiction constitutional as applied to class actions)
Wal‑Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96 (2d Cir. 2005) (strong policy favoring settlement; standard for review)
Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85 (2d Cir. 2008) (FDCPA’s private‑attorney‑general, deterrence purpose)
City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974) (factors for evaluating substantive fairness of class settlements)
Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423 (2d Cir. 2007) (discussion of cy pres principles and limits)
Mirfasihi v. Fleet Mortg. Corp., 356 F.3d 781 (7th Cir. 2004) (criticized cy pres‑only settlements as problematic)